Global stocks rose Wednesday as anxiety about the global financial system began to fade following three high-profile bank failures.
London, Tokyo, Frankfurt and Wall Street futures advanced. Shanghai declined. Oil prices gained.
Fears global banks might be cracking under the strain of interest rate hikes to cool inflation temporarily pushed aside unease about slowing economic growth. Some calm has returned after regulators announced measures to shore up the system.
“Clearly, investors have not completely lost their anxiety,” Robert Carnell and Min Joo Kang of ING said in a report.
In early trading, the FTSE 100 in London rose 0.7% to 7,533.61. The DAX in Frankfurt advanced 0.7% to 15,242.25 and the CAC 40 in Paris gained 1.1% to 7,168.69.
On Wall Street, the future for the benchmark S&P 500 index was up 0.9%. That for the Dow Jones Industrial Average added 0.7%.
On Tuesday, the S&P 500 dipped 0.2%. Most stocks in the index gained, but that was offset by big declines for some banks and modest losses for tech shares.
The Dow slipped 0.1% and the Nasdaq composite lost 0.4%.
In Asia, the Shanghai Composite Index lost 0.2% to 3,240.05 while the Nikkei 225 in Tokyo advanced 1.3% to 27,883.78.
The Hang Seng in Hong Kong jumped 2.1% to 20,192.40 after Chinese e-commerce giant Alibaba Group announced plans to split into six business units in an effort to become more agile and unlock value for investors. It said they would include e-commerce, entertainment and logistics.
The Kospi in Seoul added 0.4% to 2,443.92 and Sydney's S&P-ASX 200 advanced 0.2% to 7,050.30.
India's Sensex gained 0.5% to 57,883.28. New Zealand declined while Southeast Asian markets rose.
The failure of two U.S. banks and one in Switzerland creates a dilemma for central bankers who are trying to cool economic activity and bring down inflation that is near multi-decade highs.
The Federal Reserve and central banks in Europe and Asia normally would hike rates further. But the bank failures showed institutions are vulnerable after earlier rate increases caused prices of bonds and other assets on their books to fall.
Traders placed bets Tuesday that the Fed will raise rates at its next meeting in May, though the slight majority still expects rates to hold steady. Traders are still largely betting the Fed will have to cut rates as soon as mid-year to prop up the economy.
Reports on the U.S. economy are mixed. The job market is solid, but smaller corners of the economy have been showing more weakness.
A report Tuesday showed consumer confidence is strengthening, contrary to expectations.
Another report suggested U.S. home prices softened in January from December, but not as much as economists expected.
In energy markets, benchmark U.S. crude advanced 44 cents to $73.64 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 39 cents on Tuesday to $73.20. Brent crude, the price basis for international oil trading, added 21 cents to $78.35 per barrel in London. It gained 53 cents the previous session to $78.65.
The dollar gained to 131.99 yen from Tuesday's 130.80 yen. The euro declined to $1.0831 from $1.0842.
